This time, Israel turned aside from its standard knee-jerk response of massive military punishment and targeted assassinations to Palestinian terrorist outrages - at least for the moment. Instead, prime minister Ariel Sharon resorted to diplomatic retaliation: he ordered preparations for a meeting with new Palestinian leader Mahmoud Abbas broken off, government contacts with the new Palestinian administration cut, support for European economic aid to reach the Palestinians withdrawn, and the Gaza Strip sealed off from its vital supplies of food and medicines. Postponement of a meeting with Abbas was inevitable anyway because of the long list of Israeli concessions he demands to buy his consent to this meeting. This was the comment of the outgoing US secretary of state Colin Powell's comment on Sharon's steps late Friday, January 14: What Sharon did, I hope temporarily, is to say we welcome you, Abbas, but you've got to get these terrorists under control. debkafile's political analysts believe that the key word here is "temporarily." The prime minister is not expected to withstand the pressure to retract the punitive measures he announced Friday for more than a few days.

The Qassam missiles and mortar shells raining down on Israeli civilian and military targets on both sides of the Gaza border in the last two weeks are beginning to look like the opening shots of a major Palestinian offensive across a broad front. It is clearly timed to peak as the Palestinian election date of January 9 approaches. debkafile's military and Palestinian sources report that orchestration is no longer in the hands of a single extremist group, Hamas. Seven Palestinian terrorist groups have formed an ad hoc coalition with a more far-sighted goal than drawing the Israeli army into an extreme reprisal so as to sabotage the vote and Mahmoud Abbas's election. Their eye is on the election's aftermath. Taking Abbas's win for granted, they are playing on his weakness to keep him running scared and make him too dependent to raise a finger against them.

The two Lahava Hill outpost's mobile homes adjoining Yitzhar near the West Bank Palestinian town of Nablus were not chosen for evacuation Monday, January 3, on the spur of the moment. debkafile's political sources report that the time and place were selected and prepared days in advance by prime minister Ariel Sharon. He ordered defense minister Shaul Mofaz to carry out the engagement as an object lesson for those who would resist his plan to remove 21 Gaza Strip settlements and four in the northern West Bank starting July. Tuesday, December 4, Sharon received the most explicit warning so far of the perils inherent in his evacuation plan from Israeli Shin Beit intelligence director Avi Dichter, one of the few counter-terrorist executives anywhere with a proven success record. In his annual report to the Knesset Foreign Affairs and Defense Committee, Dichter pointed out that for Israel to withdraw from the Philadelphi route that follows the border with Egypt made no security sense. Without an Israeli military presence there - even if Egypt takes over - Gaza-based Palestinian terrorists will transform southern Israel into a second South Lebanon.

The passivity of Mahmoud Abbas (Abu Mazen), frontrunner to succeed Yasser Arafat in January 9 election, in the face of Palestinian violence is noted by Israeli defense chiefs. Last week, Israeli prime minister Ariel Sharon complained during his welcoming speech for British premier Tony Blair: the Palestinian Authority employs 30,000 security and police officers in the Gaza Strip. Yet they have not taken the slightest step to restrain terrorist attacks on Israel. Sharon and his government are committed not to make waves that might spoil Abbas's run for election. But the relentless mortar and missile assaults on Israeli targets in the Gaza Strip are too egregious to ignore or swallow.All these threats were dealt with at the special conference Sharon called Wednesday, December 29, of national security chiefs - but the resumed small-scale knife attacks by West Bank Palestinians were largely ignored.

debkafile postulates a fictional scenario and likely consequences. Just imagine if the 7,500 Israeli dwellers of the Gaza Strip decided tomorrow to pack their portable possessions, abandon their homes, schools, synagogues, cemeteries, playgrounds, farms and the lives they built and moved out in unison - without waiting for Ariel Sharon's evacuation axe to fall next year. They would leave their furniture and immovable property to the Israeli government and army to protect. This act would pre-empt prime minister Sharon's disengagement/evacuation pledge to dismantle their villages by September 2005; it would cut short the furious national debate over the rights and wrongs of their case and their passive resistance campaign; even make redundant the behavioral psychology coaching given to police and soldiers to prepare them for the agonizing task of forcible evictions.

Israel's prime minister Ariel Sharon was warned many a time to beware of placing all his major policy eggs in the George W. Bush basket. But from the time he first took office more than three years ago, he never wavered from his bond with the US president. Their friendship was often cited as one of Sharon's prime assets. And until last week, the Bush administration stood behind the prime minister and heartily endorsed his plan to withdraw from the Gaza Strip and northern West Bank in stages ending in September 2005. But then the wind blowing in from Washington suddenly turned chill. In the last week, according to debkafile's Washington sources, the White House suddenly spun its sympathies around from Ariel Sharon and his disengagement plan to Mahmoud Abbas (Abu Mazen), Fatah frontrunner in the Palestinian January 9 election, and his sweeping demands for territorial concessions.

A ton and a half of high explosives smashed into the Israeli military compound at the Rafah border crossing into Egypt, injuring 11 Israeli soldiers, four critically. The mighty explosion erupted from a secret 800-meter long tunnel, the longest the Palestinians have dug so far. But debkafile's military sources report that the strike against the Rafah crossing was no run-of-the-mill Palestinian terror attack such as Israel has endured for decades, but a meticulously-planned military operation in which a battalion-scale force was deployed. Sunday night, all the Palestinian terrorist groups in the Gaza Strip proved they could work together under a single commander. debkafile's military sources name him as 62-year old Khan Younes-based Palestinian brigadier general Saib Ajez, a veteran officer of the moribund commando-trained Palestinian Liberation Army and the best tactical brain the Palestinians have. He has 20,000 men under arms at his disposal

Unlike the rough and ready burrows that "import" most Palestinian terrorist manpower, weapons and explosives supplies from Sinai - or the hidden buried bomb craters sunk under Israeli positions - the still unfinished Karni Tunnel was built to last. Clearly designed by competent engineers, plastered reinforced concrete walls run its 300-meter length. Israeli intelligence has known about its existence for six months, but never found its location till this week. Israeli commanders and military planners ordered the hunt because of the acute danger the tunnel represents to all their counter-terror efforts in southwest Israel. Finished, the project would have run 500-600 meters, making it the longest Palestinian tunnel discovered yet. It was to have headed under the electronic security fence marking the Gaza border and come out deep inside Israeli territory.

Thursday night, November 25, Stephen Hadley, designated national security adviser in the White House, telephoned Mahmoud Abbas - Abu Mazen - the ruling Fatah's sole nominee to succeed Yasser Arafat, and asked him when was the best time for a visit to Ramallah - before or after the January 9 election. After, said Abu Mazen firmly. "Now I had better be left to campaign on my own." Last week, Abbas ducked out of a photo opportunity with US secretary of state Colin Powell for fear of damaging his chances with the Palestinian voter. This week, the incoming US national security adviser consults him on his travel schedule. Ramallah has clearly undergone a metamorphosis in the three weeks since Arafat's departure. Washington is even sympathetic to the new Palestinian leader's reluctance to be seen too close to American or Israeli officials; understanding that his most urgent priority now is to gain endorsement from the Arab world.

With nine days to deadline for candidates, at least seven or eight contestants are expected to put their names down to run against Mohammed Abbas, best known as Abu Mazen, in the January 9 Palestinian presidential election. Even in his own Fatah, his nomination is not assured. Yet lavish expressions of support are being extended to him on every hand in the West; outgoing US secretary of state Colin Powell came to Jericho especially to meet him Monday, November 22 and through him to "re-engage" Washington's Middle East commitment; he will be followed later this week by a bevy of European foreign ministers, Jack Straw of Britain, Sergei Lavrov of Russia, and Miguel Moratinos of Spain. President George Bush and UK premier Tony Blair have hailed him as the herald of democracy for the Palestinian people, others as guarantor of the Middle East road map. Israeli prime minister Ariel Sharon has offered to pull Israeli troops out of West Bank towns to facilitate the presidential election and shown his approval in other ways.

Some 40 gunmen opened automatic fire in the Arafat mourning tent in Gaza City Sunday night, November 14, shaking up the assembled gathering only two days after Yasser Arafat was buried in Ramallah. Bursting into the tent shortly after the arrival of Mahmoud Abbas, the man Fatah had just nominated to run for Palestinian president, they could easily have killed him and gunned down all the mourners packed in the tent. As it turned out he was unhurt. Two security men were killed and four injured. debkafile's counter-terror sources reports that this was a deliberate ambush. It was set up by the dead leader's adherents in the Gaza branch of the al Aqsa Martyrs' Brigades. Their actions were programmed with almost ritual precision to convey certain messages to Arafat's would-be successor.

The penultimate stage of the US-Iraqi Fallujah offensive and the final laying to rest of Yasser Arafat - though not necessarily of Palestinian terrorism - occurred on the same day, Friday, November 12. The two events prefaced democratic elections in Iraq - and now also for the Palestinians - both in January. Palestinian voters go the polls on January 9; Iraqis elect a general assembly on January 27. In between the two, on January 20, President George W. Bush is to be sworn in for his second term - that is provided the first two events take place on schedule. The apparent assassination attempt staged against Arafat's designated successor Mahmoud Abbas aka Abu Mazen in Gaza two days after the burial does not promise a smooth transition. For the Palestinians, Arafat's death has opened the way for regime change by the ballot after four years of crippling, suicidal terror.

Wednesday night, November 10, Yasser Arafat's grotesquely protracted demise had just about reached breaking point when two things happened. The Fatah-Tanzim stirred up anti-Israeli riots in Jerusalem and West Bank under the slogan: "Arafat's heritage is the gun" and "the Jews Poisoned Mohammed, they killed Arafat." Then followed an announcement by Palestinian foreign minister Nabil Shaath: Arafat's brain is functioning only partially. All his organs but for his heart and lungs have failed. These events capped a day which saw another twist in the drawn-out cliffhanger of Yasser Arafat's demise which started 13 days ago.

Tuesday, November 9, Suha Arafat's French lawyers and former Palestinian prime minister Mahmoud Abbas (Abu Mazen), struck a deal. It fixed the Palestinian Authority's financial obligations to Yasser Arafat's widow and let him finally die unambiguously and in peace at the end of a morbid tug of war between his wife and Palestinian Authority leaders. But this did not happen immediately. The confusion surrounding Arafat's condition for eleven days - officially alive, unofficially dead - was to be sustained a little longer - mainly to save Mrs Arafat's face. The settlement allowed a funeral to be arranged on "Orphan Friday" of Ramadan, November 12 (as debkafile reported earlier) - unless a new crisis pops up. Our sources have seen some of the principle terms of the Palestinian accord with Suha Arafat.

On Monday, November 8, it looked as though after ten days, the brawl within the Palestinian leadership over Yasser Arafat's body and ill-gotten fortune might be running out of mind-boggling maneuvers, when French president Jacques Chirac stepped in. Whereas until now, he had insisted on the whole mess being removed from France tout de suite, Monday, November 8, he saw a way of using the arrival of present and former Palestinian prime ministers, Ahmed Qureia (Abu Ala) and Mahmoud Abbas (Abu Mazen), to pick up points for France and score a few against the US interest. After a consultation with his Middle East advisers, he decided to back Suha Arafat all the way and at the same time reach out to the radical, rejectionist wing of the Palestinian camp - PLO politburo chief Farouk Kaddumi, Arafat's close confidant Hanni al Hassan, Force 17 commander and senior terrorist chief Col. Feisal Abu Srakh, as well as Mohammed Jihad, an important Jordanian Palestinian general.

French president Jacques Chirac's patience with the Palestinians' desperate maneuvers to cover up Yasser Arafat's demise has run out. debkafile's Paris and Washington sources reveal exclusively that Friday, November 5, exactly a week after Arafat was admitted to the Percy military hospital near Paris, the French president put in a call to the White House and informed President George W. Bush that it was all over. Paris and Washington both then swung into action. An American delegation, organized at top speed by US Middle East diplomats, called on Palestinian prime minister Ahmed Qureia in Ramallah on Saturday, November 6, and asked him how Washington could help expedite a fitting end to the episode. The visit was more a token of support than a practical offer of help.

From the moment on Thursday, November 4, when a French official stood outside Percy military hospital and solemnly declared "Mr. Arafat is not dead," preparations rushed forward for his funeral. The immediate outcome was a split that rent the Palestinian leadership and Arafat's associates into two camps. Jihad Islami, Hamas, Al Aqsa Martyrs Brigades and the other Palestinian organizations with a vested interest in continuing their campaign of terror against Israel were quick to plant a concocted rumor in the Palestinian street and mosques that Israel had slowly poisoned Arafat. This stratagem was intended to fan the flames of anti-Israeli violence and discredit moderate Palestinian leaders with thoughts of dialogue or peace - or even the ceasefire which Mahmoud Abbas is trying to broker. It was meant to make the Palestinians angry enough to refuse any accommodation with the Jewish state and insist on stepping up its war. This would tilt the succession struggle against the moderates and for the champions of continuing confrontation.

Although Yasser Arafat's French physicians at the Percy military hospital near Paris have yet to come up with a definitive diagnosis of his condition, the Palestinian succession struggle has begun. The warring factions are acting on the assumption that he will not return to Ramallah and are fighting to fill the power vacuum. This premise is shared by Israel. The Carmel street market bombing Monday, November 1, claimed by the ultra-violent Popular Front for the Liberation of Palestinian, is seen by debkafile's Palestinian experts as an opening shot in the contest. The camp supporting Arafat sought to demonstrate that no leader as soft on Arafat's war of terror against Israel as is former Palestinian prime minister Mahmoud Abbas (Abu Mazen) would be allowed to step into the ailing leader's shoes.

The first winter rain bucketed down mixed with hailstones as two Jordanian helicopters carried the seriously ill Yasser Arafat out of Ramallah early Friday, October 29. Within an hour, he was out of the Middle East aboard a French presidential aircraft fitted out as an ambulance with life-support systems that whisked him from Amman to a French military hospital in Paris for urgent medical treatment. The circumstances of his exit indicate that, despite the veteran Palestinian leader's sinking health, waning popularity and a reputation tainted with rampant corruption, he remains a force capable of sustaining the war of terror he declared on Israel four years ago, although for three of those years he was confined to his Ramallah headquarters. They also signal the onset of a new stage in that war and the entry of a new lead player: France.

The deterioration in Arafat's health has caught Sharon unawares. He is currently in full tilt of an assault on government and parliament to hammer home his disengagement plan against massive resistance. The distraction of Arafat's sudden departure from Ramallah threatens to slow down his plans in the short term. A long term threat cannot be ruled out. Established in an Arab or European country, the Palestinian leader would pose a different sort of peril, one that could undermine Sharon's disengagement scheme.